Public liability insurance covers the cost legal fees and compensation if a claim is made against your business. This could be because your business activities have caused damage to someone’s property, has injured them, made them ill (or even caused death). It doesn’t matter how big or small your business is – having the right level of cover can give you peace of mind – here’s what you need to know

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Do you need public liability insurance?

You don’t need public liability insurance by law – unless you own a horse riding school, but having appropriate cover means your business is financially protected if a customer did decide to take you to court.

Whether you need public liability cover or not, comes down to the nature of your business rather than its size. It’s recommended that you have cover if your work brings you into contact with the public – even if you’re self-employed.

If you own a shop then it’s easy to see why you might need liability insurance – for example if someone tripped or slipped and injured themselves on your property. But the same goes if you work alone – such as if you’re a hairdresser or a tradesman and dyed someone’s hair the wrong colour, or spilt paint on a client’s expensive carpet. If you didn’t have public liability cover, then you’d be expected to meet the costs of compensation yourself.

It’s worth knowing that if you work (or want to work) with some public-sector organisations like councils and schools, then you’ll be expected to have appropriate liability cover.

What is covered by public liability insurance?

A good public liability policy should cover the cost of:

•Your legal bills

•Compensation

•Repairs to property

•Hospital and ambulance costs (recouped by the NHS)

In most cases you’ll also be given the option of adding on extra features – such as cover for leased equipment lost or damaged in your care. But before you get carried away and opt for an all singing, all dancing policy, think carefully about what you actually need.

When it comes to any form of insurance, there’s no one size fits all and the amount of cover you’ll need depends on lots of different factors, such as the nature of your business and how often you deal with the public.

Insurance providers offer varying amounts of cover so it’s important to check that whatever you’ve signed up for, is enough. For example, some councils and other government organisations will expect you to have between £5 and £10 million worth of cover.

Can you compare quotes if you own more than one rental property?

The cost of your policy essentially comes down to how risky (or how dangerous) your business is and what the chances are of someone making a claim. Factors that can influence the price include:

•The size of your business and the number of employees you have – the bigger it is, the riskier it’s considered, which can push up your premium.

•What your business is – if you’re in a high-risk industry (like run a building site or demolition firm) then you’re likely to pay more than someone who runs a haberdashery, for instance.

•Your claims history – if your business has made claims in the past then this can drive up your policy price because the assumption is that you’re in a risky industry and will claim again.

One benefit of public liability insurance, is that it’s tax deductible and classed as a business expense (worth remembering when it comes to filing your tax return).

Of course, when you’re a busy business owner, the last thing you want to do is compare public liability insurance – so let us do it instead.

Comparing has never been easier – just tell us a bit about what you do and we’ll bring you dozens of quotes from trusted providers. You just need to choose the one that best fits your needs – then you can relax and get back to the important task of running your business.